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The interaction between muscle weight/body weight and serum creatinine is obvious and well understood. In
our eyes, the FDA is highly unlikely to approve bardoxolone on this serum creatinine data alone.
Weight loss leads to massive overestimation
of true kidney function, when using MDRD
and serum creatinine
Patients in a bariatric surgery study
lost 27kg in 6 months:
Measured, absolute mGFR decreased by
-9ml/min/1.73m2 (p=0.021)
MDRD eGFR (estimated based on serum
creatinine) increased by
13ml/min/1.73m2 (p<0.001)
The weight loss of 27kg therefore caused
an overestimation of the true GFR by
22ml/min/1.73m2
*We recognize this is a play on the famous Geico commercials. We don’t own rights to the gecko but we think even he could con firm a loss in
muscle mass will reduce serum creatinine/increase eGFR.
FDA guidance is not equal to a SPA, and the FDA
will not automatically approve bardoxolone
What bulls think: What we think:
FDA guidance: Sponsor can file for FDA guidance is unsurprising. Tolvaptan was
Accelerated Approval based on retained approved (in part) on the same endpoint. However,
benefit analysis at 52 weeks. it’s not a SPA.
Reata was able to show a decrease in Serum creatinine decrease was an artifact due to
serum creatinine at 52 weeks. profound weight loss. No evidence of real efficacy.
Reata will be able to replicate this FDA will not approve bardoxolone based on retained
playbook in every other kidney disease. eGFR benefit in Alport (or any other kidney disease).
We are working on filing a citizen’s petition to provide the FDA with our analysis.
The EMA probably already told Reata that it can’t
file – and its partner dropped the program last year
Source:10-K
Bulls have celebrated the fact that AbbVie dropped Reata for a total cash payment of only $330M ($75M of
which upfront), just weeks prior to the read out of 2 pivotal trials.
The drug developers at ABBV are not stupid and were in possession of all patient level data and regulatory
correspondence. They dropped this program for a reason. If this isn’t a giant red flag, we don’t know what is.
Detailed Report
Executive Summary (1/2)
Reata Pharmaceuticals is a clinical stage biopharmaceutical company focused on
developing small molecule therapies bardoxolone and omaveloxolone to treat rare forms of
1 chronic kidney disease (CKD) and a rare neurological disease called Friedreich’s ataxia
(FA), respectively.
Reata Pharmaceuticals has rallied in recent months on the promise that it could file an
NDA for bardoxolone based on a “retained eGFR benefit” endpoint, which it was
3 subsequently able to demonstrate. However, this effect is due to the profound weight loss
that results from taking the drug, which in turn artificially decreases serum creatinine,
thereby increasing eGFR.
There are other ways to measure GFR, which will likely prove bardoxolone is ineffective.
4 Furthermore, the FDA will correlate the change in eGFR with change in body weight and
call Reata’s bluff.
Executive Summary (2/2)
Bardoxolone was previously shown to be ineffective in reducing the risk of end stage renal
5 disease, and it demonstrated significant safety concerns (primarily heart failure events).
Abbvie recently terminated its licensing agreements with Reata just weeks prior to the Phase 2
6 readouts.
A number of regulatory concerns are currently looming over Reata. The FDA guidance is
unsurprising, as Tolvaptan was already approved – partially -on the same endpoint in another
7 rare kidney disease. However, the guidance doesn’t mean the FDA will ignore the totality of the
clinical data. The FDA must reject the NDA if it doesn’t find substantial evidence of efficacy.
The company’s disclosures indicate that the EMA likely already told Reata they can’t file based on the
current clinical data, as “additional discussions will be needed”.
We expect the FDA to do the same after the company’s Pre-NDA meeting, in which a negative
“regulatory update” press release would likely send the stock down >50% and could happen any day.
We would retract our report if Reata were able to back its claims with additional data. We’ve
8 already debunked their standard defense.
1 Reata Pharmaceuticals Overview
• $6.8 billion current market
capitalization with $664
million cash on hand at the
end of 2019.
• Stock has tripled, reaching
a peak of ~$250 since
positive data
announcements on
bardoxolone and
omaveloxolone in October
2019.
• We estimate bardoxolone
accounts for approximately
75% of the company’s
current valuation.
ILLUSTRATIVE
Creatinine
• estimate GFR through formula
This is what we are GFR
trying to figure out
Creatinine
excreted in
Urine
3 Who has a higher serum Creatinine?
Creatinine
This is what we are GFR
trying to figure out
Creatinine
excreted in
Urine
3 Reata only measured serum creatinine
and claims that its drug improves eGFR
What Reata has shown:
Serum creatinine decreased 4 weeks
after discontinuation of a 48-week course
of bardoxolone (= eGFR increased).
Creatinine
Creatinine
from
in Serum What Reata is trying to convince
Muscle Creatinine
investors and the FDA of:
Creatinine
This is definitive proof that chronic
bardoxolone treatments are improving
GFR
GFR.
Creatinine
excreted in
Urine
3 What bardoxolone does and the
importance of the “retained benefit”
• The acute increase in eGFR has been
shown to be clinically meaningless as
an outcomes study failed in 2012.
Creatinine
Nice Trick! GFR
Sorry, Reata!
Creatinine
excreted in
Urine
3 Bardoxolone causes profound weight loss
“Bardoxolone methyl has been associated with
significant decrease in weight, which could, in theory
contribute to observed increases in eGFR.”
Effects of bardoxolone methyl on body weight, waist circumference and glycemic control in obese
patients with type 2 diabetes mellitus and stage 4 chronic kidney disease
3 Some formulas account for weight loss
in calculating eGFR; MDRD does not
• Creatinine is made in muscles. Serum
creatinine is highly dependent on
body weight.
If the cystatin C data supported Reata’s hypothesis, they surely would have shown it.
3
Weight loss causes a decrease in serum
creatinine, thereby increasing eGFR:
Evidence from interventional studies
Patients in a bariatric surgery
study lost 27kg in 6 months:
Measured, absolute mGFR
decreased by -9ml/min/1.73m2
(p=0.021)
MDRD eGFR (estimated based
on serum creatinine) increased
by 13ml/min/1.73m2 (p<0.001)
The weight loss of 27kg
therefore caused an
overestimation of the true GFR
by 22ml/min/1.73m2
Importantly, cystatin C
clearance was unaffected by
weight loss (-2ml/min/1.73m2,
p=0.51)
The FDA will likely be able to
use Reata’s cystatin C data to
call their bluff.
3
Weight loss causes a decrease in serum
creatinine, thereby increasing eGFR:
Evidence from interventional studies
• If we wanted to prove in a clinical study that our drug works, we would have chosen such an
endpoint. At the very minimum, we would have used a 24hr urine collection to actually
measure creatinine clearance.
• We suspect that there’s a very good reason why Reata didn’t do this.
• However, the FDA can demand an analysis of cystatin C clearance, which can be done based
on the blood chemistry samples that Reata already collected.
4 There are other ways to measure GFR and prove that
bardoxolone is ineffective: Cystatin C clearance will
prove that bardoxolone is ineffective
We know, that cystatin C clearance is:
The FDA’s guidance does not mean they won’t pivot and take into consideration the
totality of the clinical data, which we have presented here. We expect the same
response from the FDA after the Pre-NDA meeting if they don’t find substantial
evidence of efficacy.
7 Regulatory Woes
• Due to the reasons outlined in this presentation, we expect the same outcome with the
FDA after the company’s Pre-NDA meeting.
• Despite the FDA having provided guidance that a retained eGFR benefit over placebo
may be enough to support approval,
• A negative AdCom could still result in approval, though the enthusiasm would wane due
to the insufficient support of safety and efficacy in Alport Syndrome and CKD.
7 Tolvaptan Approval
• Tolvaptan approval was based off the REPRISE trial, which was designed
and conducted under a Special Protocol Assessment (SPA).
• Though not an absolute guarantee, a SPA agreement indicates that the FDA
has thoroughly reviewed and established that a clinical trial is adequately
designed to support subsequent acceptance of an NDA.
• The primary endpoint that Tolvaptan approval was based on was eGFR, and
Reata is assuming this will suffice for bardoxolone approval, based on their
discussions with the FDA.
However, FDA guidance doesn’t carry the same weight as a SPA and is more
susceptible to requests for modifications from the FDA.
Further, Tolvaptan’s approval was supported by a second
7 study that showed a statistically significant improvement of
outcomes
8 Data analysis we would like to see
• We are happy to publicly change our opinion if Reata releases the following data to prove true
the true efficacy of bardoxolone.
• We believe that those are all analyses that the FDA will require anyway:
Cystatin C values and CKD-EPI-cysC at baseline and at 52 weeks for bardoxolone and placebo arms in
CARDINAL
Patient level data/ regression of change in eGFR by MDRD and change in body weight from week 0 to
52, for each arm in CARDINAL
Change in mGFR in CARDINAL from Week 0 to 52. If not available, please explain why urine creatinine
was not measured in a potentially pivotal CKD trial.
• Reata has the data. Why haven’t we seen it? AbbVie has seen it and they chose to walk away.
What is Reata hiding? The company could publish the FDA meeting minutes. Nothing stops
them from doing so.
8 Reata’s defense: Bardoxolone has been shown to increase measured
GFR (inulin clearance method) in a Japanese study
• We are aware that mGFR increased by 6.6ml/min/1.73m 2 at 16 weeks in the TSUBAKI study
(ASN 2017).
• However, this is the effect of acute bardoxolone treatment. We don’t dispute that bardoxolone
increases GFR in an acute manner.
• We believe that this acute effect is caused by hyperfiltration and potentially harmful.
• The FDA doesn’t consider it to be clinically meaningful either – that’s why RETAINED benefit
after discontinuation for 4 weeks needs to be shown.
• We believe that in Reata’s case, the claimed benefit is primarily a function of weight loss.
8 Reata’s defense: Bardoxolone does not cause a reduction in muscle
mass/ creatinine production/ creatinine excretion